Sep 10

Dealing with Annual Leave after Lockdown

Happy Office Workers



Under normal circumstances at work, employees generally book and take their annual leave throughout the year spreading the cost of that leave evenly.  Most companies have a Holiday Policy or a fairly standard procedure for requesting and taking annual leave.

Many companies have online tools to help them manage Annual Leave throughout the year.

However, Coronavirus has caused a few (well a lot more than a few really!) challenges.  During ‘lockdown’, individuals could not go away on holiday, so they were less likely to want to book it.  This has created a ‘back up’ of annual leave for companies to have to deal with when they return to work post ‘lockdown’ or return employees from their furlough leave.

When business environments return to something a little more normal, I suspect they do not want to be faced with an onslaught of holiday leave requests just when we need our employees the most.

This is a short guide on what you can practically do to help manage annual leave, especially those returning from a period of furlough leave.

What is the normal Statutory Right regarding Annual Leave?

Holiday entitlement under employment legislation is detailed in the Working Time (Amendment) Regulations 2007 which came into effect on 1st April 2009.  Employees (and Workers) are covered by this legislation.   The minimum statutory requirement for a full-time employee is 28 days or 5.6 weeks including bank holidays.  Of course, employers can offer more annual leave, but they must not offer less than this.

What else should I know about Annual Leave?

Well, there are a few other things:

  • Full-time employees (and workers) entitlement to annual leave usually accrues at approximately 2.33 days per month during the first year of employment.
  • Part-time employees (and workers) are entitled to the same as full-time workers, but it is ‘pro-rated’ to their working hours.
  • A Contract of Employment should stipulate how public holidays are included in the annual leave entitlement. Some companies choose to separate them because it suits their operational requirements more effectively.
  • Employers stay in control of when and how annual leave is booked and taken, not the other way around. Taking unauthorised leave could be a disciplinary offence.
  • Employers can agree to unpaid holiday or they may offer time-off-in-lieu if additional hours worked. They can also agree to ‘carry-over’ some unused annual leave or operate a flexible way of taking it.
  • The law about the calculation of pay during periods of annual leave has changed significantly, so seek advice if you are not sure how to pay your employees during periods of annual leave.

How has this changed due to Coronavirus?

It has made it difficult for some workers to take all of their statutory annual leave in some cases.  The Government has therefore amended the Working Time Regulations 1998 to give workers the statutory right to carry over 4 weeks of their statutory annual leave into the next two leave years.

This does not mean employers have to agree to carry leave over on this basis unless it has not been ‘reasonably practicable’ for the annual leave to be taken in the leave year.   The Government have produced guidance on what that means, but remember, the employer remains in the ‘driving seat’ so if you are not sure if you are impacted by this change, please feel free to contact us for guidance.

 How does Annual Leave work if I have staff who are on Furlough Leave?

Government guidance states that it would not be ‘reasonably practicable’ for a worker to take annual leave whilst on furlough if the employer was not able to meet the requirement to pay normal pay.

However, if your employees wish to use some of their annual leave during a period of furlough leave, this may be a good solution for you so my suggestion would be to grant leave if requested by your employee.  Remember though, you will need to pay them 100% of their normal rate for the period of leave and that includes Bank Holidays.

It may also be practical to request that some of the leave is taken during a period of Furlough Leave but take care and be reasonable if you adopt this approach, especially if your employee has been ‘sheilding’.

How much should I pay my employees if they take annual leave during Furlough?

You must pay your employees 100% of their normal rate of pay if they use annual leave during furlough leave.  Remember calculating holiday pay can be complex if your employees work variable hours so please get in touch if you need help with this.

How do Bank Holidays work during Furlough Leave?

If it is normal for your business to take bank holidays off, then the bank holiday will be treated in the same way as normal leave, albeit paid at 100%.  If bank holidays are considered normal working days, you will have a choice.  You can choose to treat them as normal annual leave or you can ‘credit’ the leave day.  Either way, the entitlement remains the same regardless of whether they are furloughed or not.

 Can I force employees to take annual leave?

Yes, you can.  This is defined in the Working Time Regulations 1998.   An employer can instruct a worker to take annual leave by giving notice that is at least twice the duration of the leave that must be taken.  That means four weeks’ notice for leave of two weeks duration.  If your business closes during a Christmas period, for example, you can also instruct your employees to ‘save the days’ so they do not use more than their annual entitlement.

Should I allow employees to carry over their leave?

This is a practical decision for each business to make depending on the circumstances of that business.  If the business has continued to operate as near as normal (albeit with employees working from home in some cases), it may be advisable to ensure annual leave is taken as normal and spread out over the year.  Essentially, if you can grant leave requests without significant business impact, my recommendation would be to keep it that way.

If, however, granting leave would have a significant impact on your business or you have not been able to conduct your business during Coronavirus, there is a strong likelihood that leave will be ‘accruing’ for your employees.  In this situation, you may want to consider a temporary change to your normal annual leave booking arrangements especially if you anticipate a flood of annual leave requests at the back end of the year.  This is where ‘carrying over’ leave may be a viable option for you.  Remember though, you can determine how much leave can be carried over and when and how it can be taken (subject to compliance with the Working Time Regs).

 Can I ‘buy out’ annual leave?

No, not unless your employee is leaving, or you are terminating employment.  This is because annual leave is specifically to allow for employees to take ‘rest and recuperation’ from work.  If they have worked so hard it has not been possible for them to take their leave, they are likely to be extremely tired and this is when accidents can happen.  Believe it or not, annual leave is a health and safety requirement … many employers forget this.

I hope you have found these guidelines useful.

If you would like to know anything more about annual leave or any other aspect of employing people, please email or call on 07525 923329

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